East Hampton to pierce the tax cap with $118.9M budget

East Hampton Town is proposing a $118.9 million budget next year that raises the tax levy by roughly 7%, exceeding the state cap.

Officials said the tentative budget, which hikes spending by 7.4%, helps the town keep pace with rising costs and maintains services. It also strengthens offices like the building department, which has nearly doubled its staff over the past year to eliminate a backlog of permit applications. The budget additionally helps support a solid waste fund operating in the red, officials said.

The proposal would require the town to levy $74.9 million in taxes, an increase of 6.96% over 2026. The board would have to override the state cap, which limits levy increases to 2% this year.

For a home with a $1.33 million market value, the budget would hike the annual town tax bill by $97 outside the villages, and by $46 inside a village, according to Supervisor Kathee Burke-Gonzalez’s budget message.

In a discussion at Tuesday’s work session, board members said it was worth piercing the cap to raise salaries, allowing employees to earn a “living wage” and benefits. 

The town currently has 347 full-time employees, Town Administrator Rebecca Hansen said. Salaries and employee benefits account for about $73 million, or 61%, of the budget.

Unionized Civil Service employees will receive a 5% raise next year. Town police unions do not yet have agreements past 2026; the police budget proposes a 4.2% increase in full-time salaries. 

“There's not one thing that hasn't multiplied dramatically in this country in the last number of years,” Councilwoman Cate Rogers said. ”You have to recognize the cost of living for your employees, so that it's a livable job for them.”

The budget also funds three new positions, 12 promotions and 12 requested merit raises, according to Burke-Gonzalez’s budget message. The supervisor's base salary would increase from $148,350 to $154,284, and the base salary for council members from $93,564 to $97,306.

Officials said the rising cost of utilities and insurance are adding pressure, too. Health insurance is budgeted to rise 4.7% next year, to $14.8 million.

The building department budget would increase $730,000, bringing its total budget to $2.5 million. Officials said that reflects a push to process permits and inspections faster.

Solid waste, recyclables and compost management at facilities in East Hampton and Montauk is another rising expense. Town officials cited the increased cost of transporting and processing waste off Long Island.

It has been difficult for the town to hire full-time employees in that department, Hansen said. The town has spent more than $160,000 in overtime for that department so far this year, about double what it had budgeted, according to budget documents.

While revenues from tipping fees are expected to grow, the proposal allocates an additional $1.16 million from taxes to that fund.

“I think we have to recognize we'll run at a loss,” Councilman Ian Calder-Piedmonte said of the waste fund.

The tentative budget now moves into the review stage and can be amended by the town board. A public hearing on the budget will be scheduled for Nov. 5, with votes on a measure to override the tax cap and adopt the final budget happening later that month.